CIMA CIMA-F1
CIMA F1 Financial Reporting Flashcards
Which two boards operate under the IFRS Foundation?
What is the ISSB and what does it do?
What is the role of the IFRS Foundation?
What is the role of IOSCO?
What does the IFRS Interpretations Committee do?
Distinguish rules-based from principles-based regulation.
Outline the IASB standard-setting due process.
Why is financial reporting regulated?
Distinguish national from international regulators of financial reporting.
What is the difference between IFRS Accounting Standards and IFRS Sustainability Disclosure Standards?
What are the five fundamental principles of the CIMA Code of Ethics?
What does the fundamental principle of integrity require?
What does the fundamental principle of objectivity require?
What does professional competence and due care require?
What does the fundamental principle of confidentiality require?
What does professional behaviour require?
What are the five categories of threat to the fundamental principles?
Describe the conceptual-framework approach to ethics.
What is NOCLAR?
Give an example of a self-review threat in financial reporting.
Define corporate governance.
What is the board's overall responsibility regarding financial reporting?
What is the role of an audit committee?
Why should the roles of CEO and Chair be separated?
Distinguish rules-based from principles-based corporate governance regimes.
What does 'comply or explain' mean?
What are executive and non-executive directors?
What is the board's responsibility for internal control?
What is the stewardship principle in financial reporting?
Why does good corporate governance matter to financial reporting?
What is the objective of general purpose financial reporting?
What are the two fundamental qualitative characteristics of useful financial information?
What are the four enhancing qualitative characteristics?
What makes information relevant?
What are the three attributes of a faithful representation?
Give the Conceptual Framework definition of an asset.
Give the Conceptual Framework definition of a liability.
What are the recognition criteria in the Conceptual Framework?
What measurement bases does the Conceptual Framework identify?
What is the concept of capital maintenance?
What is the reporting entity?
What is IAS 8 now titled under IFRS 18?
What is the going concern basis of preparation?
How is a change in an accounting estimate accounted for?
How is a change in accounting policy accounted for?
How is the correction of a prior-period error accounted for?
Which standard governs the presentation and disclosure of financial statements from 2027?
Did IFRS 18 change the recognition and measurement of items?
What does a complete set of financial statements comprise?
What are the three categories in the statement of profit or loss under IFRS 18?
What two subtotals must be presented in the P/L under IFRS 18?
What is included in the operating category of the P/L?
What is included in the investing category of the P/L?
What is included in the financing category of the P/L?
What is a management-defined performance measure (MPM)?
What must an entity disclose about its MPMs under IFRS 18?
What are IFRS 18's principles on aggregation and disaggregation?
Under IFRS 18, is 'operating profit' a defined subtotal?
How are assets and liabilities classified on the statement of financial position?
What makes a liability current?
What is the purpose of the statement of changes in equity?
What is other comprehensive income (OCI)?
What is the general rule on offsetting?
How much comparative information must be presented?
How is materiality applied to presentation?
How often must financial statements be presented?
What is IFRS 19 and how does it relate to IFRS 18?
What is property, plant and equipment under IAS 16?
How is PPE measured on initial recognition?
Which subsequent expenditure on PPE is capitalised?
What are the two measurement models for PPE after recognition?
What is depreciation?
What is the depreciable amount?
How is straight-line depreciation calculated?
How does the reducing-balance method work?
Do we depreciate land and buildings?
Where is a revaluation gain recognised?
Where is a revaluation loss recognised?
How is a change in useful life or residual value treated?
How is the gain or loss on disposal of PPE calculated?
What happens to the revaluation surplus when a revalued asset is sold?
What is component depreciation?
When does depreciation of an asset begin?
When is an asset impaired?
What is 'recoverable amount'?
What is 'value in use'?
How is an impairment loss on an asset held at cost treated?
How is an impairment loss on a revalued asset treated?
What is a cash-generating unit (CGU)?
Give two external indicators of impairment.
Give two internal indicators of impairment.
How often must goodwill be tested for impairment?
Can an impairment loss be reversed?
How is a CGU impairment loss allocated?
What is the floor below which an individual asset in a CGU is not written down?
What is the key criterion for classifying an asset as 'held for sale'?
What conditions make a sale 'highly probable' under IFRS 5?
How is a held-for-sale asset measured?
Are held-for-sale assets depreciated?
Where is a held-for-sale asset presented in the SOFP?
What is a discontinued operation?
How is a discontinued operation presented in the P/L?
How is a revalued asset treated on reclassification to held for sale?
What happens if held-for-sale criteria cease to be met?
What are 'costs to sell'?
How is a write-down to fair value less costs to sell recognised?
Can the 12-month held-for-sale period be extended?
Define 'events after the reporting period'.
What is an adjusting event?
What is a non-adjusting event?
Give an example of an adjusting event.
Give an example of a non-adjusting event.
How are dividends declared after the reporting date treated?
What is disclosed for a material non-adjusting event?
What if events after the reporting period show the entity is no longer a going concern?
What is the 'authorisation for issue' date?
What is the correct double entry for a non-adjusting event?
At what value are inventories measured?
What is net realisable value?
What is included in the cost of inventory?
Which cost formulas does IAS 2 permit?
On what basis are fixed production overheads absorbed into inventory?
On what basis are variable production overheads absorbed?
Which costs are excluded from the cost of inventory?
When is inventory written down to NRV?
Can an inventory write-down be reversed?
When is the unit (specific) cost method used?
What are conversion costs?
When is the cost of inventories recognised as an expense?
What is the IFRS 16 definition of a lease?
What is the lessee accounting model under IFRS 16?
How is the lease liability measured initially?
How is the right-of-use asset measured initially?
Over what period is the right-of-use asset depreciated?
How is the lease liability measured subsequently?
What are the two recognition exemptions available to lessees?
How is a short-term or low-value lease accounted for?
How is a lease incentive accounted for?
What charges appear in profit or loss for a lease (lessee)?
What is the lease term?
What two lease classifications apply to a lessor?
How does a lessor recognise operating lease income?
How does a lessor account for a finance lease?
Which discount rate does a lessee use for the lease liability?
Where are the right-of-use asset and lease liability presented?
What are the three sections of the statement of cash flows?
Under IFRS 18, where does the indirect method now start?
Distinguish the direct and indirect methods.
How is a profit on disposal of an asset treated in the indirect method?
How is depreciation treated in the indirect method?
Where is tax paid presented in the statement of cash flows?
What are cash equivalents?
Does a bonus issue of shares appear in the statement of cash flows?
Does a revaluation surplus appear in the statement of cash flows?
Give two examples of investing activities.
Give two examples of financing activities.
In the indirect method, how does an increase in inventory affect cash?
In the indirect method, how does an increase in receivables affect cash?
In the indirect method, how does an increase in payables affect cash?
Why is the statement of cash flows useful to users?
Distinguish direct from indirect taxes.
Distinguish corporate from personal taxes.
Why does taxable profit differ from accounting profit?
What are capital allowances?
Why is depreciation added back in a tax computation?
What is allowable versus disallowable expenditure?
What is exempt income in a tax computation?
What is a balancing allowance or balancing charge?
How may a chargeable gain on the sale of an asset be taxed?
How can a trading loss be relieved?
What is deferred tax and why does it arise?
What is a taxable temporary difference?
What is the tax base of an asset?
What does the tax expense in the P/L comprise?
What is an under- or over-provision of tax?
Distinguish input VAT from output VAT.
How much VAT is payable to the tax authority?
Distinguish the gross from the net selling price for sales tax.
What is an ad valorem tax?
Distinguish progressive, regressive and proportional taxes.
Distinguish the formal from the effective incidence of a tax.
What is a withholding tax?
What is a current tax liability?
What is a deferred tax asset?
Distinguish the marginal from the effective tax rate.
Why do governments give capital allowances?
What is corporate residence and why does it matter?
Distinguish an overseas subsidiary from an overseas branch for tax.
What is double taxation?
How is double taxation relieved?
What is transfer pricing?
What is the arm's-length principle?
What is the tax risk of manipulating transfer prices?
Distinguish tax avoidance from tax evasion.
What are the ethical issues in tax planning?
What is BEPS?
What is the Pillar Two global minimum tax?
What is a permanent establishment?
Why is taxing the digital economy difficult?
What are the main purposes of taxation for a government?
What are 'green' or environmental taxes?
How does a double tax treaty typically affect withholding tax?
What are the three motives for holding cash (Keynes)?
What is a cash budget?
Why is short-term cash-flow forecasting important?
How should short-term cash surpluses be invested?
What does the Baumol model do?
What does the Miller-Orr model do?
What are the costs of holding too much cash?
What are the costs of holding too little cash?
Why can reported profit differ from cash generated?
How can technology improve cash forecasting?
What is the treasury function's role in cash management?
What is the cash operating cycle?
Name the main sources of short-term finance.
What is a bank overdraft?
How does an overdraft differ from a short-term loan?
What is debt factoring?
Distinguish factoring with recourse from without recourse.
What is invoice discounting?
How can trade payables be a source of finance?
What are the risks of over-relying on trade credit?
What is the matching principle in financing?
How do you choose an appropriate source of short-term finance?
What are trade terms and settlement discounts?
What roles do banks and trade partners play as fund sources?
What is working capital?
What are the components of the working-capital cycle?
How is inventory days calculated?
How is receivables days calculated?
How is payables days calculated?
What is the operating cycle in days?
What is overtrading?
What are the symptoms of overtrading?
Distinguish an aggressive from a conservative working-capital policy.
What is the current ratio?
What is the quick (acid-test) ratio?
What is the central trade-off in working-capital management?
Why can a profitable company still fail?
Distinguish permanent from fluctuating current assets.
What is the effect of lengthening payables days?
What is the effect of shortening receivables days?
What is the objective of receivables management?
What techniques are used to manage receivables?
How is an early-settlement discount evaluated?
What is the objective of payables management?
What is the objective of inventory management?
What is the economic order quantity (EOQ)?
In the EOQ formula, what do C, D and H represent?
What is buffer (safety) stock?
What is the reorder level?
What is just-in-time (JIT) inventory management?
What is the purpose of an aged-receivables analysis?
What extra issues arise in managing receivables from overseas customers?
What are the costs of holding inventory?
How does managing the cash cycle overall create value?
How does technology improve working-capital management?
How should receivables management balance sales and risk?
Card 1 of 258. Question side.